Thursday, October 30, 2008

I've been working on my Ustream website and reformatting my computer to windows XP.I have to admit, there are some things I liked that Vista had that XP doesn't have, such as the Audio mixer and Vista's Media Center having better functionality. Besides those perks, I'm glad I have Win XP because I have some essential programs that I can now run that wouldn't have worked on the old 64 bit OS, and I also don't have nVidia driver caused monitor seizures.

Next up on the agenda is working on my automated trading system and making "how to" video tutorials.

Wednesday, October 22, 2008

Andrew Lahde, manager of a small California hedge fund, Lahde Capital, burst into the spotlight last year after his one-year-old fund returned 866 percent betting against the subprime collapse.

Last month, he did the unthinkable -- he shut things down, claiming dealing with his bank counterparties had become too risky. Today, Lahde passed along his "goodbye" letter, a rollicking missive on everything from greed to economic philosophy. Enjoy:

Today I write not to gloat. Given the pain that nearly everyone is experiencing, that would be entirely inappropriate. Nor am I writing to make further predictions, as most of my forecasts in previous letters have unfolded or are in the process of unfolding. Instead, I am writing to say goodbye.

Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, "What I have learned about the hedge fund business is that I hate it." I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.

Wednesday, October 15, 2008

"The credit belongs to the man who is actually in the arena; whose face is marred by sweat and blood; who strives valiantly; who errs and comes short again and again because there is no effort without error and shortcoming; who knows the great enthusiasms, the great devotion, spends himself in a worthy cause; who at best knows in the end the triumph of high achievement; and who at worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who have never tasted victory or defeat."Theodore Roosevelt

Another Down day in the market. I'm not sure why some people that visit this blog dislike me. I never claimed to be a guru. I've shown great humility and many of my worst trades ever on this blog and yet people find enjoyment in my failures. Besides the negatives, I know for a fact that I have helped many people in there trading and that is why I kept this blog going for so long. I'm not deleting this blog because there is a lot to be learned of the journey I have taken as a trader for the last 3 years. Trading futures is very tough. I first lost half my account in the first 6 months of trading and then I made it all back and doubled my account the following year. At the start of 2008 my account was at its peak and I took a devastating long trade over the holiday weekend which more than wiped out half of my account in a day. No one expected the move January 21 2008. I took some time to recover from the loss. I came back and started trading consistently again and I was up nicely after a couple months. My hope and dreams of making it were starting to come back as a trader but then I made some terrible mistakes in June trying to short Crude Oil when it was around $120 a barrel followed up the next month by betting gold was a good buy around $850, unfortunately my timing was a month off. It was a vicious cycle I had put myself in. A cycle that I had seen for the 2 previous years of trading. Make a sold month worth of profits and then lose it all in a couple days from moving stops because I didn't expect the market to be so wild. I have proven to myself that I lack discipline and that I should practice more even after 3 years of trading.

"I have not failed 10,000 times. I have successfully found 10,000 ways that will not work"Thomas Edison

"The desire to win is born in most of us. The will to win is a matter of training. The manner of winning is a matter of honour."Margaret Thatcher

"Risk more than others think is safe ~ Care more than others think is wise ~ Dream more than others think is practical ~ Expect more than others think is possible." Unknown

"If you love what you do, you won't work a day in your life" origin unknown

"If you believe in yourself, have dedication and pride and never quit, you'll be a winner. The price of victory is high, but so are the rewards."Paul "Bear" Bryant (Late, great coach of the Alabama Crimson Tide football team)

Thursday, October 09, 2008

Seeing Citigroup, Merrill Lynch and Bank of America plunge today was a sight to see. If stock price has anything to do with the financial strength of a company then maybe US Bancorp is a good choice for a bank, not to mention having Warren Buffet owning nearly 4% of the company. You know he's never going to sell.

SPY just jumped off a cliff and is free falling now. S&P down 40% from last year highs. Dow futures almost to 8,000. This time last year we were above 14,000.The last 2 days we have seen 500pt selloffs in the last hour of trading. We are at a 76% fib level. We broke 61% fib retrace like butter 2 days ago. 2002 lows,,here we come.

October 6, 2008. Chart of YM. Dow opens gap down, going down over 800pts intraday.I'll tell you what happened. I was long 4 NQ contracts and short 1 YM contract. I was short 2 contracts on YM but I covered the additional contract on YM in the morning. My internet connection went out a little after I covered 1 contract on YM short. I waited to see what was going to happen because the market looked quiet and we bounced off the morning lows. The market kept dropping so I tried calling my broker but I was on hold for 10min and then I got disconnected for some reason. One hour before the market close my internet comes back on and I was stressed out. I decided to add to the YM short right near the lows when the Dow was down 800pts(even though I had a buy signal- market internals were like 300/1 to the downside, so I said screw it). I thought the market was going to fall -1000pts for the circuit breaker to kick in. Well, we reversed and I took a big loss on my YM short that I just added to and I sold my NQ long a little too soon for a loss as we rallied before the close. Lesson learned - trade 1 instrument, 1 direction, unless you plan on doing a longer term pair trade. My original plan was to hold the NQ/YM trade for a bounce, with the ability to add to the YM short if the market kept dropping (my internet went out so I couldn't add to the YM short unless I called my broker, I should have called sooner). My original thinking was that NQ would bounce more than YM because there would be more short covering in Tech names as opposed to financial names because of the short sell ban.I hate Comcast.Overall, I let emotions get to me on this trade and I miss-managed this trade very badly and took a big loss. I was up 7k in the last 2 weeks, but I lost all that plus another 3k. It may not seem like a big loss to some of you or compared to my January blow up, but it was a mistake that really set me back because I keep losing weeks worth of profits from making the same disastrous mistakes on crazy trading days like Monday.

Friday, October 03, 2008

The stock market was devastated by the worst one-day collapse in history yesterday in a pandemonium of panic selling that shattered all records and swamped stock exchanges around the country and overseas.

The best-known market barometer -- the Dow Jones average of 30 industrial stocks -- plummeted 508 points, five times the previous record set last Friday. The Dow closed at 1738, dropping 22.6 percent, or nearly double the 12.8 percent plunge of Oct. 29, 1929, the crash that began the Great Depression.

Does a stock market crash cause a depression or add trouble an already weak economy?